Revenue: Determine the Transaction Price (Step 3 of ASC 606)

Now that you’ve been introduced to the 5-step model within ASC 606, Revenue from Contracts with Customers, it’s time to take your learning to the next level! In this CPE-eligible, eLearning course (1.0 CPE), we dive into step 3, determining the transaction price.

The essence of step 3 is to determine the amount an entity expects to be entitled to for satisfying the performance obligations in revenue contracts with customers. The transaction price may include fixed amounts set forth in the contract, variable amounts, or both! It might also include adjustments for significant financing arrangements (i.e., time value of money) or the fair value of non-cash consideration. We cover these considerations and more when determining the transaction price using examples in this interactive and entertaining online course!

 By the end of this course, you should be able to: 

• Recall how an entity should recognize each of the various elements included in the transaction price 
• Identify which methodology is most appropriate when estimating variable consideration and recall other considerations impacting the estimate of variable consideration